Current Issues in The Global

Waqf Development

Raditya Sukmana
Professor of Islamic Economics
Faculty of Economic and Business
Universitas Airlangga
 Waqf role and SDGs.

Waqf based development released by IsDB (Islamic Development Bank) support SDGs. Which consist:

Poverty alleviation

Improved access and quality of health

Improved quality education

Waqf assets are estimated to reach USD 1 trillion worldwide, so it is possible to realize them.
If waqf assets can be managed productively and can get a rate of return (10%) per year, then
every year there will be a global funding of USD 100 billion from the benefits of waqf.

Source: Abdullah, M. (2018). Waqf, Sustainable Development Goals (SDGs) and maqasid al-shariah.
International Journal of Social Economics, 45(1), 158-172.
 Waqf transformation is needed to encourage
the creation of waqf-based entrepreneurship.

Realizing an
integrated waqf

Institutional Transformation
3

• Autonomous Activity Transformation

• Court controlled • Agriculture sector
• State controlled Mobilization Transformation • Fishery sector
• Cash waqf • etc
• Sukuk based waqf
• Qardhul hasan

Source: Iman, A. H. M., & Mohammad, M. T. S. H. (2017). Waqf as a Framework for Entrepreneurship. Humanomics,
33(4). 419-440.
 The practice of waqf accountability in
Dompet Dhuafa.

Dompet Dhuafa uses various mechanisms to show its

accountability to stakeholders.

To show upward accountability Dompet Dhuafa actively seeks

to the donors (utilization) and suggestions and feedback from
regulator, Dompet Dhuafa uses the wāqif concerning ways to
financial and non-financial improve the management of
disclosure statements. the waqf.

Financial and non-financial

disclosures are announced
to the public. Waqf for
public(reputation building)

Source: Ihsan, H., Sulaiman, M., Mohammad Alwi, N., & Adnan, M. (2017). A Study of Accountability
Practice in Dompet Dhuafa Waqf of Indonesia. Journal of King Abdulaziz University: Islamic Economics,
30, 13-32.
 Waqf finance the University, is it
possible?
Some basic things needed to build a waqf university
(the case of Malaysia and Turkey).

Source of income (waqf,

shadaqah, charity, zakat) The beneficiaries (the
• Businessman recipients)
• Government officials • Students
• Community • Staff
• Rich student • Lecturers
Investment of funds • Scholarships for students
• University waqf managers must make
sharia-based investments. Benefits to be offered
5
• The principle of caution is important, • Student scholarships for poor
especially when there are symptoms students and high achieving
of an economic crisis. students.
• Salary for lecturers and other
staff.

Source: Mahamood, S. M., & Ab Rahman, A. (2015). Financing Universities

through Waqf, Pious Endowment: Is it Possible?Humanomics, 31(4), 430-
453.
 Source of income
Example...

The UAE Ambassador once donated This hostel is rented for female
some money to build a special students and the rental proceeds will
dormitory for female students be used for scholarships dedicated to
attending IIUM. institutional beneficiaries

.
This hostel provides 16
apartments with 4 individual
rooms.
6

Source:Mahamood, S. M., & Ab Rahman, A. (2015). Financing Universities through Waqf, Pious Endowment: Is it
Possible?Humanomics, 31(4), 430-453.
 Source of income
Example...

UPM received financial assistance from Sultan Selangor,

Sharafuddin Idris Shah as much as MYR 300,000 for waqf
funds, called UPM science waqf funds.

Source: Mahamood, S. M., & Ab Rahman, A. (2015). Financing Universities

through Waqf, Pious Endowment: Is it Possible?Humanomics, 31(4), 430-453.
 The role of waqf in overcoming farmers 1. waqf provides a
piece of land
financial problems. Ethics
Waqf institution

2. (a) Financing (Muzara’ah)

Waqf-Muzara’ah-supply chain model to address Private Institutions

the financial challenge. Partnership arrangement •2 (b) Logistics (supply chain)
Farmer
is also suggested in the model to mitigate the • Agricultural inputs e.g.
issues of high interest rates and collateral that •Seeds, pesticides, fertilizers
constrains the financial ability of the farmers • Machinery
and their agricultural output. • Transportation
9

2 (c) Expertise supports

•2 (d) Provision of Information on Market
• Micro & Macro-economic data

Share of Profit and Loss

Source: Moh’d, I. S., Mohammed, M. O., &Saiti, B. (2017). The Problems Facing Agricultural
3 Share of Profit and Loss between farmers and private institution
Sector in Zanzibar and the Prospects of Waqf-Muzar’ah Supply Chain Model: The case of
clove industry. Humanomics, 33(2), 189-210.
• It is hoped WMSCM, will enhance and improve small farmers’ welfare,
• The model is participatory in nature, and therefore, it will help to encourage the
sense of belonging
• About 98 per cent population of Zanzibar is Muslim and they have been shunning
away from taking an interest-based contracts/financing because of their religious
obligation.
• Furthermore, it is expected that this model will have impacts on the other various
aspects of life of the people of Zanzibar.

10
 The role of waqf for small entrepreneurs

Waqf-Based Social Micro Venture Fund (WSMVF) was proposed as

an alternative model for developing waqf-based microenterprises.

WSMVF Goals

Provision of Support for micro

funding business managemen

Small Entrepreneurs
Bank

11

Provision of
training

Source: Haneef, M. A. (2017). Waqf-based Social Micro Venture Fund: A Proposal for the Malay-Muslim Community in
Singapore JKAU: Islamic Econ Vol 30 No 1 pp 37-60
Collecting waqf contributions
a) Monthly contribution:
b) b) One-off donation: Collection points or boxes can be set up in mosques and places of interest
frequently visited by the community.
c) Waṣiyyah or planned giving: An individual can bequeath only up to 1/3 of their assets as contribution. For
example, from the sale of HDB flats after one’s demise (MUIS, n.d.).

Investing
Should be shariah compliant

12
Disbursement
enterprises
The role of waqf for small entrepreneurs

13

Source: Haneef, M. A. (2017). Waqf-based Social Micro Venture Fund: A Proposal for the Malay-Muslim
Community in Singapore JKAU: Islamic Econ Vol 30 No 1 pp 37-60
 Waqf Awareness

Low awareness of
cash waqf

Expand educational
Lack of
programs that are more
understanding
creative, interesting, and
interactive. The cause factor
Suggestion
Lack of
Expand seminars,
14 promotion
determination of waqf
days and waqf carnival.
social cultural
waqf institution influences
accountability.

Source: Adeyemi, A. A., Ismail, N. A., & Hassan, S. S. B. (2016). An

Empirical Investigation of the Determinants of Cash Waqf Awareness in
Malaysia. Intellectual Discourse, 24, 501.
 Waqf performance measurement
standards

Contingency Framework for Measuring Waqf Performance

Maqasid al-Shariah

Nowadays, there is no standardized Propose an effective and

measurement system for waqf significant performance
performance. Most waqf institutions still measurement system in the
rely on financial reporting and economic governance and management of
indicators in measuring waqf waqf institutions. Input Output Outcome
performance.
15

Waqf Activities & Social

Resources Products Impacts

Source: Noordin, N. H., Haron, S. N., &Kassim, S. (2017). Developing a Comprehensive

Performance Measurement System for Waqf Institutions. International Journal of Social Sustainability & Growth
Economics, 44(7), 921-936.
 Islamic wealth Management

Capital accumulation
The great struggle to protect the system
from conventional financial invasion.
The struggle between risk sharing and
risk transfer.

Redistribution of capital

On the capital re-distribution side,

there is also a struggle to
modernize the waqf system. In short,
the Islamic world is seriously
searching for an economic model that
17
is not only in conformity with its
principles and traditions but is also
able to address the demands of the
contemporary world.

Source: Çizakça, M. (2015). Islamıc Wealth Management in History and at

Present.Journal of King Abdulaziz University: Islamic Economics, vol 28.no 1 pp 3-19
 Hamdard University, India

• Established: 1989
• Established by Hamdard (Waqf) Corporation, India
• Has good reputation in India for its pharmacy faculty
• Has Hamdard Institute of Medical Sciences and
Research (HIMSR) & Hakim Abdul Hameed
Centenary Hospital
 Al-Azhar University, Cairo

• Established:
– 970-972 M = madrasa
– 1961 = University status
• Established as waqf from Fatimid dynasty
• Become center of Sunni Islam studies since Saladin’s era as well as
Arabic literature
• Provide scholarships for thousands of students around the world
• Scholarships and operational costs are met from waqf’s profit
• Waqf assets: buildings, paddy fields, shops etc
Ponpes Tazakka Pekalongan
Dokumentasi Go Fish Tata Surya
 Darussalam University, Gontor
• Established:
– 1958 = madrasa
– 1963 = Institut Pendidikan Darussalam
– 1994 = Institut Studi Islam Darussalam
– 2013 = Universitas Darussalam, Gontor (UNIDA)
• Location: Ponorogo
• Has a unique concept called Wakaf Diri (waqf-ing oneself), a concept which
teachers and lecturers endowing themselves and their skills to serve madrasa
and university
• Madrasa and university are supported by various business units that developed
and supported the independence of waqf properties of Gontor
 International Islamic Unviersity
Malaysia

Dana waqf yang terkumpul digunakan untuk membangun azman hashim complex
dimana terdapat:
1. 3 bank
2. Cafe
3. Toko buku
4. Hall.
Hasil sewa per tahun (RM 500.000= Rp 1,5 M) untuk membiayai pendidikan di
IIUM
26
27
 32

• Source: Abdullah, M. (2018). Waqf, Sustainable Development Goals (SDGs) and

maqasid al-shariah. International Journal of Social Economics, 45(1), 158-172.
 TERIMA KASIH

Prof. DR. Raditya Sukmana

(Head of Islamic Economic Department. FEB Universitas Airlangga, Surabaya )
• Education
• S1 Manajemen (Keuangan) Univ Airlangga (grad 1999)
• S2 Economics Georgia State University USA (grad 2002)
• S3 Economics International Islamic University Malaysia (grad 2010)

• Jabatan Akademik
• Lektor (2011)
• Lektor Kepala (2015)
• Profesor (2019)

• Visiting Scholar IRTI Islamic Development Bank Dec 2014-Jan 2015, Jeddah, Arab Saudi

• Author of 9 Journal Scopus (H-Index 3)

• Presenter in Bayero University (Nigeria,2017), Harvard University (USA,2014), Cambridge University

(UK,2012), La Trobe University (Australia, 2009), Oxford University (UK,2005), etc

• Email, Hp/wa: raditya-s@feb.unair.ac.id, 0878 5421 6776